Collaborative technologies are widely used to enable teams to function effectively in today’s competitive business environment. However, prior research has been inconclusive regarding the impacts of collaborative technologies on team performance. To address the inconsistencies in prior work, this paper seeks to understand the mediational mechanisms that transmit the effect of collaborative technologies on team performance. Specifically, we theorize that there is a relationship between design features and knowledge contextualization. We further theorize relationships between knowledge contextualization and a team’s capability for collaboration, specifically examining collaboration know-how and absorptive capacity, both of which are expected to influence team performance. We conduct a field study including 190 software project teams from a large organization in China. The results support our theoretical model and demonstrate that design features have an impact on performance outcomes, mediated by collaboration know-how and absorptive capacity.